Abstract
A minimum costly zoned effluent charge program for the control of air pollution is considered paying attention to the general situation where polluters' cost functions of treating pollutant are unknown to the policy authority, and an iterative procedure by which the authority can attain a set of optimal charges is presented. The algorithm consists of steps of estimating the unknown treatment cost functions by observing polluter behavior and steps of revising charges based on the estimated cost functions. In the latter steps, a newly developed solution procedure for the zoned charge programming problem is involved. Simulated use of the algorithm indicates that the iterative charge revision procedure proposed in this paper can effectively provide the optimal scheme of zoned effluent charges.
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